Karl Arranges Financing for a Limited Partnership to Purchase Real

question 103

Multiple Choice

Karl arranges financing for a limited partnership to purchase real estate in exchange for a 50% interest in partnership profits. Two weeks later, Karl sells the profits interest for $30,000. In this tax year, Karl must recognize

• A)no gain or loss.
• B)a $30,000 short-term capital gain.
• C)a $30,000 ordinary income.
• D)a $30,000 Sec. 1231 gain.

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